Election Jitters Send Trump Media & Technology Group Stock Tumbling
The countdown to the presidential election has begun, and investors are on high alert. Trump Media & Technology Group’s stock (DJT) took a hit on Monday, plummeting around 3% in early trading, despite initially opening in the green. This volatility comes on the heels of a tumultuous week, which saw the stock suffer its largest percentage decline, closing down a staggering 20% on Friday.
A High-Stakes Gamble
The company’s market cap has taken a significant hit, shedding over $4 billion since Tuesday. While the stock has more than doubled from its September lows, investors are bracing for a wild ride as the election approaches. One investor, Matthew Tuttle, CEO of Tuttle Capital Management, warns that if Trump loses the election, DJT shares could plummet to $0. “It’s a binary bet on the election,” Tuttle emphasizes.
A Meme Stock on Steroids
Interactive Brokers’ chief strategist, Steve Sosnick, notes that DJT has taken on a life of its own, exhibiting extreme volatility. “When a stock is that volatile in one direction, it has a tendency to be that volatile in the other direction,” Sosnick cautions.
Truth Social’s Uncertain Future
Trump Media & Technology Group, the parent company of Truth Social, has seen its shares rise in recent weeks as betting markets shifted in favor of a Trump victory. However, with the election outcome far from certain, investors are growing increasingly nervous. National polls show both candidates in a virtual dead heat, while key battleground states like Pennsylvania, Michigan, and Wisconsin are too close to call.
Fundamental Concerns
Truth Social’s fundamentals have long been a subject of concern. The company reported a net loss of $16.4 million in its second quarter, with expenses related to its SPAC deal accounting for half of that amount. Revenue also took a hit, dropping 30% year-over-year to $837,000. The recent departure of its COO has only added to the uncertainty surrounding the company’s future.
Trump’s Stake
Trump maintains a significant stake in DJT, with a roughly 60% interest in the company. At current levels, his stake is valued at around $3.7 billion. As the election outcome hangs in the balance, investors will be watching DJT’s stock closely, wondering what the future holds for this volatile meme stock.
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